2024 (11) TMI 1421 - HC - GST

Challenge to N/N. 09/ 2023-Central Tax dated 31.03.2023 as well as Notification dated 56/ 2023-Central Tax dated 28.12.2023 - Extension of time limit for passing order under Section 73(10) of CGST Act - HELD THAT - Let counter affidavits be filed by all the respondents within six weeks. Rejoinder if any be filed within two weeks thereafter. List on 25.02.2025.

Summary

ISSUES PRESENTED and CONSIDERED

The primary issue considered by the Court was whether the Notifications No. 09/2023-Central Tax and No. 56/2023-Central Tax, issued by the Central Government, were ultra vires the provisions of the Central Goods and Services Tax Act, 2017 (CGST Act). Specifically, the Court examined if these notifications were issued in compliance with Section 168A of the CGST Act, which requires recommendations from the GST Council for extending time limits due to force majeure circumstances.

ISSUE-WISE DETAILED ANALYSIS

Relevant Legal Framework and Precedents

Section 168A of the CGST Act empowers the Central Government to extend time limits specified under the Act in special circumstances, such as force majeure, but mandates that such extensions be based on the recommendations of the GST Council. The interpretation of "force majeure" includes events like war, epidemic, natural calamities, etc.

The petitioner relied on the precedent set by the Gauhati High Court in the case of Barkataki Print and Media Services v. Union of India, which questioned the validity of Notification No. 56/2023 due to the absence of prior recommendations from the GST Council.

Court's Interpretation and Reasoning

The Court examined whether the Central Government adhered to the procedural requirements under Section 168A when issuing the notifications. The petitioner argued that the absence of GST Council recommendations rendered the notifications invalid. The respondent's counsel conceded that while Notification No. 09/2023 was issued with Council recommendations, there was uncertainty regarding Notification No. 56/2023.

Key Evidence and Findings

The petitioner presented evidence from the Gauhati High Court's judgment and affidavits indicating that Notification No. 56/2023 was issued without GST Council recommendations. The affidavits and circulars further confirmed that the notification was issued due to urgency without prior Council input, with plans for post-issuance ratification.

Application of Law to Facts

The Court considered whether the procedural lapse in obtaining GST Council recommendations could be justified under Section 168A. The evidence suggested that the Central Government acted unilaterally in issuing Notification No. 56/2023, which prima facie contravened the statutory requirement for Council recommendations.

Treatment of Competing Arguments

The petitioner argued that the lack of recommendations invalidated the notifications, while the respondents contended that the urgency of the situation justified the government's actions. The Court noted the respondents' acknowledgment of the procedural irregularity and the need for subsequent ratification by the GST Council.

Conclusions

The Court concluded that there was a prima facie case regarding the procedural irregularity in issuing Notification No. 56/2023. Consequently, the Court stayed the effect and operation of the notification and related orders until further proceedings.

SIGNIFICANT HOLDINGS

The Court's significant holding was the interim stay on Notification No. 56/2023 and related actions, pending further examination of the procedural compliance under Section 168A of the CGST Act. The Court emphasized the necessity of adhering to statutory requirements for GST Council recommendations when extending statutory deadlines.

The Court's order highlighted the principle that statutory procedures must be followed to ensure the validity of government actions, particularly in tax administration. The final determination on the validity of the notifications would depend on further submissions and evidence from the parties involved.